A large number of advertisers recently abandoned X, previously known as Twitter, and the repercussions of this mass exodus can potentially result in a staggering loss far greater than the initial $ 11 million projection for Elon Musk's company.
In this article, we delve deeper into the potential financial repercussions, the reasons behind the dramatic advertiser withdrawal, and the possible future scenarios for X. Read more.
The Extent Of Losses
The plight of X seems to be intensifying, with potential losses that could escalate up to $ 75 million. Over 100 prominent brands have stopped advertising on the platform, and the list includes Airbnb, Amazon, Coca-Cola, Google, Microsoft, Netflix, and Uber.
This information has been gleaned through internal sales documents tracking the withdrawal of these companies. The documents also highlight the brands that might be on the verge of stopping their ads.
X's Response And Revenue Drop
Despite facing a potential revenue crisis, X maintains a confident stance. It argues that the aforementioned documents are outdated or merely part of an internal risk assessment and remains hopeful about a recovery buoyed by the remaining advertisers – potentially increasing their spending on X. However, X's advertising revenue experienced a significant $ 75 million dip.
The misinformation spread about Israel/Hamas in October contributed to the exacerbation of the issue, also causing many brands to reconsider advertising on X.
The Future That Is Yet To Come
After all, X's future appears to be hanging by a thread if advertiser boycotts continue. Advertisers are hesitant about their money funding extremists through X's newly launched creator revenue-sharing program. They are also concerned about their ads being displayed next to antisemitic posts.
On the other hand, despite the controversy, not all advertisers have left the social media. Some of the remaining advertisers include the NFL, Walmart, State Farm, Wendy’s, Office Depot, The New York Times, The Washington Post, The Economist, USAA insurance, Formula 1, and Mondelēz International.
X has already formulated a recovery strategy that includes enticing deals to bring back advertisers or increase their spending and recently rolled out a deal offering a $ 1,000 ad credit every month to any business subscribing to become a Verified Organization.
Musk's visit to Israel to express shock over the Hamas October 7 attack is seen as an indicative that X is doing everything it can to salvage the situation. However, the future remains uncertain.